Reforms Urged In Arab Countries To Attract Energy Investments
Cairo (AFP) May 14, 2002 Arab oil ministers and officials ended a conference here Tuesday calling on Arab countries to speed up economic liberalisation in order to attract much needed private investment in energy projects. Ministers and high ranking officials representing 15 of the 22 members of the Arab League pledged "to work toward more liberalisation to attract private investments," said the final statement issued at the end of the four-day 7th Arab Energy Conference (AEC). They said the power generation sector should be "totally restructured and liberalised," to stimulate private funding of the new plants required to match the increasing demand on energy, due to industrialisation and fast population growth. Mergers between Arab banks should also be encouraged, to enlarge their asset base and enable them to increase their participation in energy project financing, the statement added. The participants also pledged to work toward "more integration" between the Arab states in the sectors of oil and gas production, refining and distribution, power generation and distribution, and water desalination. They recommended that energy grids between Arab countries be linked, and that more gas and oil pipelines be set up to complement each others' needs. Arab countries should also develop "human resources" in nuclear power generation and renewable fuels, and not assume that their oil and gas wealth will be sufficient for their future energy needs, said the statement. "Despite the protests and difficulties facing nuclear energy, it is still considered an alternative (to hydrocarbons) in power generation in the future, and therefore human resources should be developed in this field to be used whenever a need arises," it said. "Arab scientific research centers and universities should cooperate in studying the potential of Arab countries in renewable energy," such as solar, wind, and hydraulic energy, "and carry out economic feasibility studies" of projects based on them, it added. Algeria, Bahrain, Egypt, Jordan, Iraq, Kuwait, Lebanon, Libya, the Palestinian Authority, Qatar, Saudi Arabia, Sudan, Syria, the United Arab Emirates and Yemen were represented at the conference, held every four years in an Arab capital. They agreed to hold the next AEC in Amman in 2006. In a background paper submitted to the Cairo conference, the Arab Petroleum Investment Corporation (APICORP) said the Arab countries need 84 billion dollars to fund upstream and downstream oil and gas projects until 2006. Twenty one billion dollars are needed to increase Arab oil production capacity, 36 billion dollars for gas production, seven billion dollars for refining and 20 billion dollars for petrochemical projects, said the Saudi-based APICORP. APICORP, a pan-Arab government body specialised in financing energy projects in the Arab countries, said the small size of Arab banks was "a point of weakness" preventing them from participating in funding expensive energy projects. It pointed out that the assets of the biggest Arab bank, the Bahrain-based Arab Banking Corportation (ABC), stood at 26.5 billion dollars only. In comparison, Citigroup's assets exceed one trillion dollars, APICORP said. Arab countries hold 61 percent of the world's oil reserves, and 25 percent of its gas reserves, according to the AEC statement. But an expert at the conference told the participants that Arab countries should no longer rely on oil and gas to produce wealth, and should engage in political, administrative and economic reforms to attract the private funding needed to diversify their sources of income. Oil "exporters are likely to go through some tough times, and enjoy some relief in other instances, but petroleum prices are not going to produce wealth" like in the booming 1970s, said the director of the Oxford Institute for Energy Studies, Robert Mabro. Community Email This Article Comment On This Article Related Links SpaceDaily Search SpaceDaily Subscribe To SpaceDaily Express Powering The World in the 21st Century at Energy-Daily.com
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